Texans are still waiting for property tax relief

Toward the end of the 86th Texas Legislature’s regular session in 2019, some of Texas’ leading politicians couldn’t stop congratulating themselves on the success of their efforts to provide property tax relief.

“We are making tremendous strides to provide long-awaited relief to Texas homeowners and businesses,” said Gov. Greg Abbott in a press release. “Our goal was not to simply mask the problem of skyrocketing property taxes, but to make transformative changes that would provide meaningful and lasting reform.”

Not to be outdone, Lt. Gov. Dan Patrick spiked the football, the San Antonio Express News reported: “We said we were on the five-yard line about a month ago. Now we have a touchdown, we have had the Super Bowl of legislative sessions in the history of the state.”

What all the buzz was about was that Abbott, Patrick and former Texas House Speaker Dennis Bonnen had pushed a plan through the Legislature that they claimed would solve Texas’ biggest problems by boosting education spending by $4.5 billion and allocating $5 billion to tamp down property tax bills.

However, recent property tax data from the Texas Comptroller of Public Accounts shows that Texans got a poor return on their $9.5 billion. Texans have not seen transformative changes or tremendous strides. Instead, their property taxes have continued to rise.

Texans’ 2021 property tax bill of $73.2 billion, due January 31, is $9.4 billion higher than they paid in January 2019, a few months before the Legislature adopted its property tax “relief” plan. School property taxes, the focus of the plan, are up by $4.3 billion over that same period.

It is true the rate of increase has slowed a bit, from 5.9% annually to 4.7%. School taxes have slowed the most. But cities actually increased their rate of growth, taking advantage of legislative loopholes in the increases allowed without going to voters.

The end result is that property taxes kept going up, only about $2.5 billion less than they would have otherwise. Not a very good return on investment on the $9.5 billion Texans sent to public schools.

However, the schools–and everyone else–have made out like bandits. School districts have received more than $18 billion of additional state funding and property tax revenue over the last three years. Cities have garnered $4.3 billion in additional property tax revenue; counties another $3.7 billion. Even special purpose districts have seen revenue increase by $2.8 billion. The total increased take by local governments — paid by taxpayers — is about $28.8 billion.

Texans should not be surprised by the Legislature’s failed effort at property tax relief. This has been going on for decades.

In 1997, Gov. George W. Bush and the Texas Legislature made an effort to cut property taxes; instead, property taxes increased by $1.4 billion. In 2006, the Legislature once again promised relief; yet in return for sending $14 billion more of their state tax dollars to public schools over a two-year period, Texans paid an additional $3.4 billion in local property taxes. And in 2015, the Legislature’s attempt to reduce property taxes by increasing the homestead exemption resulted in taxpayers paying an additional $3.9 billion.

When legislative leaders announced they had reached the 2019 deal on property tax relief, Abbott assured Texans they had finally solved the problem. “I said we will do what no one thought possible: We will finally fix school finance in Texas. And today, I’m proud to tell you, we are announcing that we have done just that,” the Texas Tribune reported.

The lesson that Texas leaders have not learned over the last 25 years is that you cannot fix school finance by throwing more taxpayer money at public schools. Texas policymakers have failed every time to fix school finance and cut property taxes for the simple reason that they will not stop spending our money.

If Texans are serious about wanting lower taxes (which is a big if, considering who they keep electing), they will have to demand that the Texas Legislature cut spending, or at least stop spending growth. Otherwise, we will be in for more of the same for years to come.

This was originally published in the Dallas Morning News.